Following a recent visit to the General Motors (GM) headquarters in Detroit by Trade and Industry minister Alec Erwin, GM has announced plans to take over full control of Delta.
Following a recent visit to the General Motors (GM) headquarters in Detroit by Trade and Industry minister Alec Erwin, GM has announced plans to take over full control of Delta.
Erwin was in Detroit seeking further investment in South Africa for the production of vehicles for the export market.
GM withdrew from the South African market in the late 80s and was bought out by local management group Delta. GM purchased a 49 per cent shareholding in Delta Motor Corporation in 1997.
“General Motors Corporation has resumed negotiations with Delta Motor Corporation with a view to potentially acquiring a majority shareholding in the company,” said Willie van Wyk, managing director of Delta Motor Corporation.
“Discussions, which began in September 2001, were temporarily shelved due to the uncertainty as a result of global events at that time.”
Delta has announced that both parties have confirmed the start of negotiations with the signing of letter of intent.
Minister of Trade and Industry Alec Erwin commended both parties on what he called a step in the right direction.
“I believe that the potential return of General Motors marks a very important step forward in the South African automobile industry. It is a statement of confidence in the achievements of Delta and in the future of the South African industry,” he said.
Business Day reported that Deloitte and Touch automotive industry expert Duane Newman said: “This can only be good for the local industry. This will integrate the South African operations into the GM global supply chain, and a wholly-owned subsidiary is going to get export business over a partly-owned one.”
Further discussions are still required before an agreement can be reached and more information will be dispensed when the parties have reached an agreement.
